After months of heated rhetoric and diplomatic groundwork, talks to overhaul the North American Free Trade Agreement will formally begin this week with Canada pushing for more stringent labour and environmental standards in the deal.

Canada's top diplomat, Foreign Affairs Minister Chrystia Freeland, will travel to Washington Tuesday where the first round of formal negotiations is set to take place.

Freeland will sit down to break bread with her U.S. and Mexican counterparts before officials get down to brass tacks in a bid to modernize the 25-year-old trade pact Wednesday.

Each side will begin to set out what it wants to see in the rewrite; in Canada's case that will include stronger environmental and labour provisions and a formal mechanism to settle thorny trade disputes.

Some interest groups are hoping for a speedy process to keep investors calm, but some international trade experts warn that business should brace for a drawn-out series of discussions.

Jeffrey Schott, a trade policy analyst and senior fellow at the Washington-based Peterson Institute for International Economics, said while the goal is for expeditious rounds, the administration of U.S. President Donald Trump has laid out objectives that could lead to an impasse.

Those include proposed changes to government procurement, rules of origin and a goal of eliminating the U.S. trade deficit.

Resistance to U.S. 'overtures'

"Those are areas where they will undercut the competitiveness of North America producers and workers and there will be resistance from Canada and Mexico to the U.S. overtures," he said.

Schott expects talks will spill over to next year, and will then be constrained by next year's Mexican presidential election, followed by U.S. mid-term congressional elections. He predicted talks will continue on into 2019, when there will be other elections, including a federal election in Canada.

"I see a low probability of an agreement on a modernized NAFTA in the near term," he told CBC News in an interview. "I think negotiators will go through what can be done that is helpful and reject efforts to try and make revisions that are counterproductive. But finding the discreet window when the political stars align in all three countries is going to be difficult, and is unlikely to take place over the next 18 months."

A potential 'deal breaker'

Schott expects quick, constructive progress in areas like digital trade, but said changes to labour provisions could spark much friction. While the U.S. has far greater issues with Mexico, Trump's aim to shred Chapter 19 of NAFTA, which includes provisions for a dispute resolution mechanism, could prove to be a flashpoint with Canada.

As a nation that is having a lot of its raw manufactured goods imported from China, Vietnam, and Indonesia you would think we would be looking to allow easier avenues for Canadian business to source product in Mexico.

China's labour cost index has increased to a point where Mexico is not an unreasonable comparison in terms of costing to their Chinese counterparts. (In some aspects)

However rather than expanding that avenue we seem to have more of an interest trying to update the Environmental and Labour practices of a Foreign & sovereign nation while to continue to grow our dealings with another nation that has made it quite clear they won't do anything about either.

There have been other indications in the press that iour government is girding up to press Canadian interests in the upcoming battle over NAFTA.

What are our interests? I ponder that. The independent decision-making body seems to be one thing. Yeah, if they say so.

Then there's the 'cultural protections'. A few lame book publishers and music moguls. Precisely the parts of the economy that are dying anyway. How much grief would you feel if Macleans disappeared? If we suddenly had a wider selection of musical choices? Probably you wouldn't even notice if Macleans and the CBC didn't tell you about it.

Personally, I think another is a recognition that resource exports aren't the same as industrial product exports. Cheap Canadian resource imports have the potential to create jobs. Cheap Canadian industrial exports have the potential to eliminate them. So far, the Americans seem only interested in the balance of trade. We want them to recognize that our resource exports in response to market forces are different from industrial product exports. And maybe get them to back down about projects like Keystone in the future?

The real bone of contention - do we offer up the lumber industry, dairy, and poultry industries if we have to?

I think we can do alright on this stuff. I live in a heavily agricultural area, and I see mushroom farms and greenhouses popping up all over the place. The modern farmer works with agricultural colleges and government programs -- which include grants -- to keep right up-to-date. You should just wish your sector of the economy were as up-to-date and efficient as these guys are.

After that, the Yanks would have no bitch with us. Ever. But that's just me. I am ready to be educated on the subject. Those are private thoughts.

The point is, realism dictates that we recognize that the Americans are always going to be our major market. The rest of the world is a bonus. We are going to have to get our elbows up ... because the Americans are going to change the rules, and nobody seems to like change when it's them that have to do the changing.

WASHINGTON — Foreign Affairs Minister Chrystia Freeland released Canada's list of key demands Monday for a new North American Free Trade Agreement as talks get set to begin in Washington later this week.

Freeland's list, which is much shorter than the U.S. wish list of more than 100 items, includes:

— A new chapter on labour standards. The original NAFTA included a labour section as an addendum, inserted into the agreement after Bill Clinton was elected and insisted on a few changes. Some officials in Canada and the U.S. have identified a goal of tougher labour rules: Increasing Mexican wages, to make auto plants in the other countries more affordable.

— A new chapter on environmental standards. This was also added as an afterthought to the original NAFTA, placed there after Clinton's election. Freeland says she wants a chapter that ensures no country can weaken environmental protection to attract investment. She also says it should support efforts against climate change.

—A new chapter on gender rights.

—A new chapter on Indigenous rights.

—Reforms to the investor-state dispute settlement process. Specifically, Freeland referred to Chapter 11 — which involves companies suing governments. She said she wants reforms so that "governments have an unassailable right to regulate in the public interest." This is not to be confused with Chapter 19, which regulates disputes between companies over dumping, in cases like softwood lumber, and which the U.S. administration might seek to eliminate.

—Expand procurement. For years, Canada has wanted to kill Buy American rules for construction projects at the state and local level. It could be a tough sell. U.S. lawmakers are demanding even more Buy American rules, which is something President Donald Trump campaigned on. Freeland said: "Local-content provisions for major government contracts are political junk food: superficially appetizing, but unhealthy in the long run."

—Freer movement of professionals. NAFTA includes a list of professions where people can easily get a visa to work across the border. It's an old list — it mentions land surveyors and range conservationists, but not computer programmers. International companies want this list expanded to make it easier for employees to move between offices.

—Protect Canada's supply-management system for dairy and poultry. Canada does not have free trade in these areas, and regulates imports and prices.

—Protect cultural exemptions. Canada insisted on protections in the old agreement for cultural industries, like publishing and broadcasting. The U.S.'s annual report on international trade barriers lists this as an irritant.

—Maintaining a process to regulate anti-dumping and countervailing disputes, like the one over softwood lumber. Freeland noted that Canada briefly walked out of the original talks in 1987, as this was a deal-breaker. The U.S. says it now wants to get rid of the resulting Chapter 19. Some observers say it might simply be modified.

What a salad of demands! Why is Canada concerned about labour rights in Mexico? Or environmental standards, and -- t4heir gender rights? Are we going to compel Mexicans to go along with this post-modern gender craziness or be shut out of our markets?

There a few things that demonstrate the incompetence and unicorn-thinking of this crowd more than the first few items on this list. It's such a shame ... the times require argumentative fighters, who are realistic and practical. Instead, we send this bunch of dreamers out to confront the mighty Trump.

=========================================

In response to Cosmo ... my view ... we should be doing like Germany is doing. We have to recognize that, in this planned economy -- and it is all managed, even the 'free trade' deals -- we should recognize that there is a whole sector of the population for which industrial work is their highest and best use, to speak in commodity terms.

We should be fostering enterprises that use our resources, and develop our industrial skills, including the engineering. but also include the trades at the highest level.

Part of the pathology of the age is that abstract people -- the financiers -- have taken over industry. Accountants replace engineers, or engineers get absorbed into management before they have more than a taste of engineering. Just to be clear, it isn't that accountant and financiers aren't part of the picture. It's that they are out of proportion to the enterprise.

Never mind Trump -- what our economy requires is a period of saving and wealth production, rather than consuming and wealth dissipation.

It's OUR labour we want to consume, not Mexican or Chinese labour. We need to produce wealth as well as consume it or harvest it.

In response to Cosmo ... my view ... we should be doing like Germany is doing. We have to recognize that, in this planned economy -- and it is all managed, even the 'free trade' deals -- we should recognize that there is a whole sector of the population for which industrial work is their highest and best use, to speak in commodity terms.

We should be fostering enterprises that use our resources, and develop our industrial skills, including the engineering. but also include the trades at the highest level.

Sure,
Focus on your strengths.

However Germany while having less of a dependence on Asia than their North American Economic counterparts has very creatively developed a dependency on Spanish, Polish, and Latvian Labour to do the things they cannot (cost) efficiently do within their borders.

As a like-minded example, of all the Jetta's produced in Ingolstadt last year the percentage of the sub-assemblies that came from within Germany is fairly low and that is replicated across several of their industries, the primary difference is the final profit on the final good is generated within Germany.

They have found a creative workaround that reduces their reliance on sea transport, we have a similar opportunity.

The problem is rather than focusing on it, we seem to be more interested in telling other governments how to run their economies and making this about social policy rather than economic policy.

There are always problems ... the point is to have a vision, a policy direction which can increase certain kinds of economic growth, and discourages others. We run an expensive education system which gives us mediocre results. It seems we pour more and more of our treasure down that hole, and it is now at the point where it's yield is negative, at least for non-STEM courses.

Everybody goes to a university or an educational institution that is pretending to be a university, and most of the product is crap. It has become a social engineering incubator, bringing with them the world of 'social justice', and as Milo Yianoppoulos says, it has not gotten to the point that the graduates are more economically useless than when they went in.

If we spent the same money rationally, developing the trades to the highest levels, for instance, we'd probably be doing our collective selves a big favour. As it is, all the services of government, except maybe medical care, are running down, becoming worse with every decade. We can't expect NAFTA to bail us out -- we have to prepare to be opportunistic and innovative with the Americans and understand that we need their good will. We will never be ab le to outmuscle them, economically. But at the same time, we are entirely dependent on them as a market, and there aren't that many countries that can be as good partners as we can be.

Beats the hell out of pressing whatever negotiating advantage we have so that we can force Mexican schools to have bathrooms for transsexual 8-year-olds.

There are always problems ... the point is to have a vision, a policy direction which can increase certain kinds of economic growth, and discourages others.

I agree with this in theory;
However I haven't come across a government who I would trust to be a competent arbitrator of what is innovative and what isn't.

You need to give industry the mechanism to be creative and to innovate and the market will be the ultimate judge as to if that innovation is successful or not.

The challenge with government pushing any industry is there is always a secondary agenda, Government A will push "Green" tech Government B will push Resources Development and in some cases neither may be the direction the market is best suited for.

Let business determine what business needs to grow is my usual approach to this.

Bugs wrote:

Everybody goes to a university or an educational institution that is pretending to be a university, and most of the product is crap.

My experience in this matter is 15 - 20 years old;
However I graduated from several Universities in Canada and even back then I would argue that many of the programs on campus don't prepare their graduates with the correct skill-set for work they would be doing in their likely profession.

We are seemingly spending a lot of energy offering enlightenment over skills and as an employers I am finding we have an abundance of the former and a deficit of the latter in the labour market.

Bugs wrote:

If we spent the same money rationally, developing the trades to the highest levels, for instance, we'd probably be doing our collective selves a big favour.

There is a massive deficit in the trades in Canada in general;
The amount of skilled trades we import from abroad year over year is stagger but necessary because we have no mechanism to fill that need domestically and as such we have become reliant on skilled trades abroad.

We have a heavily funded post secondary education system;
The fact that we don't offer more incentives or benefits to people who go into trades or fields that we need for or a potential looming deficit for is confusing.

You have a managerial viewpoint on this. At the national political level, it seems to me that the suitable role for government is to create the conditions -- security, efficient consistent courts and good laws, and market conditions. Real growth on a national scale grows virally.

Look, as I have already alluded, I live in prime agricultural country, on Lake Erie. The road I use to go into town passes two enterprises that are growing like crazy -- a mushroom operation and a maple syrup operation that supplies Sobeys. A little further up the road you will pass greenhouse operations -- selling bell peppers -- have doubled in size every year for the last five or six years. I was told they now have 100 acres 'under glass' -- well, it's plastic, but that's the terminology.

These people plow their earnings back into the business in the way a farmer would build up his herd of Herefords if you know what I mean. These businesses grow like topsy. They get important back-up from a local branch of an Agricultural College, part of the University of Guelph, and there are often grants to encourage farmers to try new crops, etc.

Nobody is choosing winners and losers. The sharp ones take a chance at a small scale, and plow the rewards back into it until they get it up to scale. It just seems natural, not something they need to go to business school to learn.

That's an example I see. Government need only create the conditions that allows these phenomena to flourish. But it happens virally. One farmer tries out mushrooms. The neighboring farmers sees their opportunity to sell their animal manure and straw. Another says ... hey, I'm going to try that myself ... and three years later, he starts up. And so it goes.

What we need is an environment which is as friendly to high quality, research-based industry, as in Japan or Germany. We only need a piece. If we had one Volvo company ...

You have a managerial viewpoint on this. At the national political level, it seems to me that the suitable role for government is to create the conditions -- security, efficient consistent courts and good laws, and market conditions. Real growth on a national scale grows virally.

Bugs wrote:

Government need only create the conditions that allows these phenomena to flourish. But it happens virally.

I think that we are generally on the same page;
I don't want Government being tasked with managing an economy by way of "We should focus on industry X and product Y nationally", and you generally seem to agree with that.

Governments role is create a condition in which business innovates and grows not to dictate to business how its should innovate or grow, the Government (Any Government) lacks the qualifications to do that.

We are absolutely on the same page on this. There can be cases where government has a role, but it should be seen as the role of removing obstacles rather than directing and managing the economy. One of the unfortunate aspects of using únemployment' as one of the main metrics in assessing economic performance is that it makes the government responsible for creating jobs.

What is hard to understand is that all the parts of an industrial system are still in a zombie-like existence in the small towns. The people that the CBC calls 'rednecks' -- and who aren't at all like the stereotypes -- are the makings of a dyn-O-mite industrial workforce. It's their highest and best use, as appraisers say.

Don't think that they can only grow mushrooms either. They can handle machinery just like ringing a bell. They have their duds, but if the bright ones stayed home, they could have something going for themselves.

We have become embroiled, as has the whole West, in a different kind of economy, one where what wealth that is produced is largely harvested from nature, yet we have this encircling financial system that has inveigled its way into almost every transaction. Credit cards are everywhere. Tax vehicles, like RRSPs, take money out of small communties and put it in the hands of financial concerns, destroying a previous system of local credit. These issues go to the heart of communities, and there is no doubt that financial regulators are unaware of such factors. They're accountants, and lawyers, after all.

Can anyone do a quick cost-benefit analysis of the role these financial institutions play in our economy? One that includes the bigger costs, as well as the bigger benefits?

This is part of the problem, as I see it. We are looking at the future through the lens of the olde left and 'right', but our societies have evolved at least two stages beyond that.
And now we are in the process of evolving a stage beyond that.

It means our cultural map is obsolete. The state is how so immense that its employees are an important part of the electorate. There comes a point where it is electorally unstoppable. It seems to be the tendency of big bureaucratic organizations -- they require more and more of people. We are at the point, surely, where we can see the state no longer serves the public, as it did in our salad days. Increasingly, into the future, the public will serve the state, if only because interest payments on the national debt will become oppressive.

We are like the tail on the American dog ... when it gets petted, so to speak, we wag. And their system is entering a crisis. We can't understand it without understanding that the big departments of their federal government are themselves so huge that it is questionable if the President can exercise control. In Washington, at the moment, some of these are, in effect, going to war with the President. It is not a war, in the usual sense of a civil war -- it is a war for electoral support, carried out in the media.

To date, the 'deep state'as it is called, only doubles down on each failure. It's amazing. But it illustrates that the civil servants involved feel 'protected' while they commit felonies by releasing classified information. And it seems organized because the leaks serve to refute the administration, as if it were a debate. These leaks are the basis of the political news most of the time. They control the coverage, so what Trump has really done is hidden behind a smokescreen of Russian collusion charges.

My only point is that this is not something in our cultural map. By the formal rules, it's none of our business. But it can hurt us, big-time, and don't think we''re immune. This is the great tragedy of Trudeau junior ... is has put our nation on a trajectory of debt like his father did, and the last time, it cost us the whole of the Mulroney and Chretien/Martin governments to recover. At exactly the wrong time.

It means we will need a Trump down the road. More likely a Mike Harris.

We are absolutely on the same page on this. There can be cases where government has a role, but it should be seen as the role of removing obstacles rather than directing and managing the economy. One of the unfortunate aspects of using únemployment' as one of the main metrics in assessing economic performance is that it makes the government responsible for creating jobs.

We are in complete agreement here;
The challenge with using the unemployment rate as a metric is that as the Public sector employs a tremendous amount of Canadians;

Seasonal positions and public sector contracts can cause that number that change for benefit in months where its needed and Governments of all stripes have likely played that game from time to time.

Bugs wrote:

This is part of the problem, as I see it. We are looking at the future through the lens of the olde left and 'right', but our societies have evolved at least two stages beyond that.
And now we are in the process of evolving a stage beyond that.

When it comes to the economy I simply back out all the non-sense when it comes to the "left" and "right" and I think the general outline of either is very simple;

If you lean left economically, you feel the Government is better suited to manage more money than the Individual.

Whereas if you lean right economically you feel that the Individual is better suited to manage more money than the Government.

And I am sure someone will correct me if I am wrong here;

I think all the additional parts added on the "right" and "left" take away from that simple more government Vs. less government mentality which I believe is still at the root of the ideology.

Bugs wrote:

It means we will need a Trump down the road. More likely a Mike Harris.

In recent history its how it usually works; its all cyclical.
Perhaps not a Trump but certainly a Harris.

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